Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
The Police Credit Union raised fixed rates.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ raised its nine and twelve month rates today, with the 1 year rate now 6.25%, a high among main banks. More here.
A WELCOME RECENT LIFT
ANZ reports that its World Commodity Price Index gained +2.9% in October from September after also lifting +1.4% the previous month. These followed three months of declines. Strong increases were recorded for dairy and horticulture, which helped to offset weaker prices for lamb and logs. In local currency terms, the index rose +.1% on the same basis but that left it -8.6% lower than a year ago
PERHAPS TOMORROW
Today was the fourth business day after the end of last month and we usually have the Barfoots Auckland sales results released by now (often in 2 working days). But they were a no-show today. Perhaps tomorrow.
MORTGAGE LENDING UP +3%, BUSINESS LENDING UP +2%, DEPOSITS UP +2%
Westpac New Zealand said its annual profit fell in the year to September 2023, as expenses and loan impairments rise. Their net interest margin increases however.They say the number of mortgage holders behind on repayments is down over the past 6 months.
TSB STAYS WITH MARKETING BACKGROUND FOR ITS NEW CEO
TSB has announced today that Kerry Boielle has been appointed as their new Chief Executive. She will start in January 2024. She is is currently with Southern Cross Health Society holding concurrent roles as Director, CareHQ and Chief Sales, Marketing & Customer Experience Officer. Prior to that she had 17 years banking experience in senior roles with both ASB Bank and Kiwibank. More here.
NO TO FLOATING RATES
New data out from the RBNZ shows that new home loan borrowers are shying away from floating rate loans with only 17% of all new lending having some of that. This is the lowest level since the series on new lending started in April 2021. Floating rate lending includes revolving credit. Investors are keener on floating rates than owner occupiers. More here.
MORE AUSSIE COMPANY BANKRUPTCIES
In Australia, ASIC data for October shows company bankruptcies were -16% lower in October 2023 than the same month a year ago. But this is a rare bit of good news on this front because year on year these bankruptcies are running +38% higher.
SWAPS BASICALLY HOLD LOWER
Wholesale swap rates have probably changed little today. The real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is down -1 bp at 5.63% and now +13 bps above the OCR. Financial markets no longer price in any chance of an RBNZ rate rise over the next three years. The Australian 10 year bond yield is up +3 bps from this morning at 4.71%. The China 10 year bond rate is unchanged at 2.68%. The NZ Government 10 year bond rate is down another -4 bps at 5.31% from Saturday, but still well above the earlier RBNZ fixing of 5.24% which was down another -14 bps from yesterday. The UST 10 year yield is still at the 4.58% it opened at this morning. The UST 2yr is now at 4.86%, so the curve inversion has deepened to -28 bps.
EQUITIES UP
The NZX50 is virtually unchanged today after last week's unusual gain. The ASX200 is up +0.3% in early afternoon trade. Tokyo has opened up +2.3% in another roaring start to the week. Hong Kong is starting its Monday up +1.4%, and Shanghai is up +0.6% at its open. Singapore is up +0.5% at their open. The S&P500 futures suggest Wall Street will open +0.4% higher following on from last week's impressive rise.
GOLD HOLDS
In early Asian trade, gold is now at US$1991/oz and down -US$1 from where opened this morning.
NZD STAYS UP, LITTLE-CHANGED
The Kiwi dollar has stayed at 59.9 USc from the 60 USc we opened at this morning. But against the Aussie we are softer at 92 AUc. Against the euro we are little-changed at 55.8 euro cents. That means the TWI-5 is still at 69.4.
BITCOIN EASES UP
The bitcoin price is rising today, now at US$35,086 and up a minor +0.3% from where we opened this morning. Volatility over the past 24 hours has been modest at just under +/- 1.2%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
37 Comments
Potentially one of the worst environments to buy risky assets in the past 100 years (time will tell of course).
https://x.com/hussmanjp/status/1721288023717847084?s=46&t=MUwQeKa7MkEJ7…
As the yield curve normalises we can expect (if history repeats) recession and downward pressures on asset prices.
Will the yield curve inversion be true to reputation once more (again time will tell but I wouldn’t bet against it).
Eg saying house prices or stock markets have bottomed as the yield curve is normalising after an inversion is like betting that night won’t follow day. There is a very high track record that night does in fact follow day - so why bet against this?
(humans aren’t rational of course even though we like to convince ourselves that we are)
Did you not spot that those are over two different time periods?
YoY the 90 and 30 day delinquent are up, but over the last 6 months it's been dropping. Just means the peak was likely 7 - 10 months ago and is dropping much slower than it went up, which isn't surprising.
The reality of a downturn is that those worse off going into it, usually get hurt the most.
Which is also ironic, the so called caring types salivating over the prospect of overleveraged specuvestors coming unstuck seem totally oblivious to the disproportionate number of less fortunates who'd be hurt in the same environment.
Almost popcorn worthy just watching the popcorn types be so far off the mark.
JPMorgan Chase has quietly revealed tens of billions of dollars in losses on securities, according to a new report on the company’s overall balance sheet.
The banking giant is now stuck with roughly $40 billion in unrealized bond losses as of Q3 of this year, which is a 20% rise over the previous quarter.
https://www.barrons.com/articles/jpmorgan-bond-losses-bank-of-america-b…
The Fed is now hiding bank bailouts on the FDIC's balance sheet - a direct arm of the US Govt. So if they need money to fund loans to "too big to fail" banks, Granny Yellen at the Treasury steps up. When the banks start going bust again, look here for a record of the bailout.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.